We use quantile regression models of Panel Study of Income Dynamics (PSID) data to assess whether initial net worth moderates the relationship between initial economic standing (net worth and income) and later net worth (measured in 2011). Conditional quantile regression results suggest the returns to an increase in 1989 net worth or income vary substantially between the 25th, 50th, and 75th percentiles of 1989 net worth, with higher returns among those with higher initial net worth. Thus, financial improvement appears to generate different outcomes depending on initial net worth. These results suggest that helping families build an asset foundation may increase the efficacy of interventions that increase family income.
Year of publication
Children and Youth Services Review